We have spoken extensively about purpose and the need for companies to realign their values and ambitions in a disrupted market. However, this means nothing if employees are not on board with change management and do not make critical interventions to “get with the programme”.
GCS has implemented its fair share of business rescues and turnarounds, and we can tell you that this is not readily achievable. However, there is a blueprint. I recently read an article on the Harvard Business Review website which sheds some light on this.
Go slow to go fast
The author of the HBR article points out that he has seen many companies rush the process of defining and then deploying their purpose. This tends to lead to disappointing results. In contrast, here are strategies I’ve seen leaders implement that have served their companies well:
Consider prerequisites. Defining and deploying a noble purpose isn’t always the best place to start. Fixing basic operational matters may need to come first. When I became CEO of Best Buy in 2012, for example, the company was plagued with fundamental execution issues. Both employees and customers were in pain, and reflecting on the company purpose was not the priority that would help stabilize the patient. Fixing operations was, so we focused our initial efforts there. Only later, once the company had turned a corner, did we turn our attention to defining and articulating its purpose.
Similarly, the analytical work that underpins a company’s strategy often informs and helps clarify its purpose and vice versa. So make sure you’re considering both before communicating your company purpose far and wide. For example, in 2018, the Ralph Lauren Corporation articulated its raison d’être as “inspiring the dream of a better life through authenticity and timeless style.” That purpose was intimately linked to a business strategy (their “Next Great Chapter”), which was developed at the same time.
Image By: Alex Kotliarskyi on Unsplash
At Best Buy, our exploration of what the company’s long-term strategy should be fed into our parallel reflection on purpose, and vice versa. Redefining the company’s market and exploring new product and service horizons helped us land on Best Buy’s purpose of “enriching lives through technology.”
The article adds that companies need to be be rigorous and inclusive. Authentic purposes are not born on mountain tops, dreamed up by a few executives or brand consultants. I believe that a company’s noble purpose is best found at the intersection of four areas:
• The human needs the company would like to address
• The company’s unique capabilities
• What the company’s employees are passionate about
• How the company can create economic value
Exploring these areas and their intersection requires solid fact finding and analysis. The process will also be way more effective if it engages a broad range of team members. For example, when reflecting on what the world would need from the company 15 years out and on how to best respond to key mega-trends, insurer AXA involved the next generation of the company’s leaders in a series of workshops, taking into account their passions and understanding of the company’s current and potential capabilities.
Similarly, when leaders at the Ralph Lauren Corporation sought to put into words the founder’s clear and unflinching vision and values, which permeated the company but hadn’t been explicitly articulated, CEO Patrice Louvet wanted to cast a wide net. Over the course of a year, the team in charge of the process held conversations in stores around the world and sought input and feedback from cross-functional focus groups, long-term employees, and, of course, founder Ralph Lauren himself.
Consider that actions speak louder than words
The HBR article points out that, when taken together, individual behaviors add up to the company culture, and they’re a powerful way to communicate and enable a company’s purpose.
Seeds blossom only when planted in the right soil, and a company purpose can fully come to life only in a corporate culture that supports it. After he became CEO of Microsoft, Satya Nadella famously transformed the company culture from an abrasive and cut-throat environment that throttled innovation to one that embraced learning, collaboration, empathy as a business imperative, and a growth mindset as a defining element of their culture. The company’s new purpose to “empower every person and every organization on the planet to achieve more,” along with its strategic shift toward mobile and cloud computing, could not have taken root without that cultural transformation.
The article adds that, similarly, Netflix’s promise to “entertain the world” and its strategy of constant reinvention depend on a strong corporate culture of freedom (with responsibility). Cofounder Reed Hastings determined early on that the success of the company depended on great engineering and creative talent, and that this talent would thrive only if unburdened from too many rules.
One of the most effective ways to ensure culture permeates an organization at all levels is to role model the expected mindset and behavior, starting at the very top. When I started as CEO of Best Buy, I spent my first week on the job working in one of our stores in Minnesota to learn from our frontliners what we needed to change to be successful. This sent the clear signal that we were going to focus on better serving our customers — and that we would do it through the intelligence of our employees.
Make it real
The article points out that in order to become reality and permeate the organization, the company purpose needs to be “translated” from abstract to practical terms. I’ve observed several inspiring ways to do this.
The author of the article points out that he has seen companies articulate what their purpose means by laying out how they want to interact with every group of stakeholders and capturing what the organization does for them when it’s at its best. For example, Johnson & Johnson’s guiding principles, “Our Credo,” spells out what the company’s purpose to “blend heart, science, and ingenuity to profoundly change the trajectory of health for humanity” means in practice for their customers, employees, shareholders, and the communities in which they operate. Here’s how they spell it out beautifully for the first group, customers:
We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to provide value, reduce our costs and maintain reasonable prices. Customers’ orders must be serviced promptly and accurately. Our business partners must have an opportunity to make a fair profit.
And under the leadership of its new CEO Laxman Narasimhan, Starbucks has defined how its purpose to “nurture the limitless possibilities of human connection with every cup, with every conversation, and with every community” translates for every group of the company’s stakeholders, when the company is at its best. For example, it promises to be a “bridge to a better future” for its employees (known internally as “partners”), to “uplift the everyday” for its customers, and to “ensure the future of coffee for all” for the farmers from whom they source the coffee beans. Full scholarships for a first-time bachelor’s degree through Arizona State University’s online program is a concrete application of the company’s promise to its employees.
And consider another example from the Ralph Lauren Corporation. Besides reflecting on what its purpose meant for every group of stakeholders, internal dialogue also led to annotating its purpose of “inspiring the dream of a better life through authenticity and timeless style” to flesh out the intention and meaning behind every word. “Inspiring,” for instance, was annotated in the following way:
We create an aspirational experience that fills the consumer with a sense of hope and possibility. We are the original lifestyle brand. “I create an inviting and aspirational world of lifestyle products; these products are both desirable and attainable to people around the world.” — Ralph Lauren
Exercises were also conducted in small groups for employees to explore how the company purpose applied to their own roles and projects.
Make it simple
The HBR article adds that, to be effective, a corporate purpose must speak to everyone. The translation from the abstract to the practical means taking the time to articulate the purpose in simple, human terms. Similarly, defining the culture that enables the purpose to come to life can be amorphous and vague until it’s distilled into a singular, powerful idea that encapsulates how employees at all levels are expected to behave day after day, rather than a bland list of feel-good principles or values too general to be useful.
At Best Buy, our first stab at defining our purpose got us to the powerful but relatively abstract idea to “enrich life through technology.” This concept became much more palatable to our more than 100,000 employees when our team anchored it around a much simpler, relatable idea to behave as an “inspiring friend.” Our team then translated it into concrete guiding behaviors — such as “be human” — that would enable all Best Buy employees, regardless of their specific function, to make that purpose come to life in their daily interactions with customers and each other.
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Netflix also provides an example of simplicity. The idea of “freedom with responsibility” is the central tenet of how they enable their purpose of entertaining the world. From that single idea spring very practical implications, from how they recruit (only top performers), make decisions (with a decision captain), and evaluate performance (adequate performance gets you a generous severance package) to their travel and expense policies (they don’t have any).
Have human conversations
The article points out that helping every employee, regardless of rank and function, develop and maintain a personal connection to, and understanding of, the company’s purpose doesn’t happen through one-off, top-down PowerPoint presentations and posters plastered on the walls of the office. This is not how human beings connect deeply to a higher calling. This is also not how the human mind learns. Here are a few examples of more effective approaches.
Personal, human stories are a much more powerful way to illustrate what a company stands for, why it exists, and how it likes to operate. From its early days, the Ralph Lauren Corporation, through its campaigns and collections, has masterfully evoked the dream of a better life. More recently, the company wanted to tell a broader, more diverse story. This culminated in a limited-edition collection inspired by historically Black colleges and universities and modeled by students, faculty, alumni, and professional models, with a campaign that included photographs, picture books, and a 30-minute film. At Best Buy, one of the most poignant demonstrations of the company’s purpose and culture in action was when employees came together to assist their colleagues in Puerto Rico during Hurricane Maria, a story which was shared throughout the company.
At Best Buy, we also organized conversations across all locations in which employees at all levels shared and reflected on what being “an inspiring friend” meant in their lives and their specific job. This helped make the company purpose personal, practical, and meaningful for every individual.
To bring their purpose to life, some companies also incorporate nudges and reminders in employees’ daily work life. Meetings at Microsoft, for example, routinely close with the following question: “Was this a growth-mindset or a fixed-mindset meeting? Why?” At Best Buy, I remember how leaders would draw out employees about their life story, their purpose in life and what drives them, and how that connects with their work. Also, under the leadership of my successor Corie Barry, transformation project meetings, such as those focused on developing the company’s ability to support aging seniors in their homes, for instance, start with team members sharing how the specific project they’re working on is personally meaningful to them — for example, as a child of an aging parent.
Focus on what you do well and refine it
If companies want to take advantage of this, they need to focus on what works well and put all of their efforts into refining it. Companies with the best product or service tend to be the most profitable.
Meticulous attention to detail and making sure that employees are engaged are key success factors.
